Lewis v. City of Chicago: Discriminatory Practice Can be Challenged at Time of Application

Lewis v. City of Chicago

Lewis v. City of Chicago: Discriminatory Practice Can be Challenged at Time of Application

The U.S. Supreme Court recently expanded the range of circumstances in which disparate impact cases can be filed, finding that an employment practice that has a disparate impact can be challenged both at the adoption of the practice and upon its application. In Lewis v. City of Chicago, 130 S.Ct. 2191 (2010), the Supreme Court allowed a minority plaintiff and hopeful firefighter to bring a claim of disparate impact relating to the test given to firefighter applicants, even though he filed an EEOC charge more than 300 days after the allegedly discriminatory practice was announced. In a unanimous ruling, the Court held that the employer’s subsequent use of the practice – not just the announcement of the practice -- could trigger the 300-day limitations period.

BACKGROUND

As the first step in its application process to select firefighters, the City of Chicago used a written examination. After the City administered the test to 26,000 applicants in July 1995, the City divided the group of aspiring firefighters into three groups: 1) a group labeled “well qualified” because they scored 89 or higher on the test; 2) a group labeled “qualified,” who scored between 65 and 88; and 3) a group labeled “unqualified” due to scores below 65.

In January 1996, the City announced that it would select candidates randomly from the “well qualified” group, which contained no minority candidates, and bring them in for further screening. If the City exhausted the top group, it would then begin drawing randomly from the “qualified” group, though it informed members of that group that it was “unlikely” that they would ever be called. Over the course of six years beginning in May 1996, the City went through eleven rounds of hiring from the applicant pool. By the tenth round, it had exhausted the top group and began to draw names from the “qualified” group.

The petitioners in Lewis were minority candidates in the “qualified” category. In March 1997, they filed a claim with the EEOC, alleging that the examination had a discriminatory disparate impact in violation 42 U.S.C. section 2000e(k)(1)(A)(i). Pursuant to Section 200e-5(e)(1), petitioners had to file charges with the EEOC within 300 days of a violation. The charges were filed more than 300 days after the City announced its policy regarding its use of the test results to group and select candidates.

A total of six applicants filed similar charges with the EEOC, which issued them all “right-to-sue” letters. In September 1998, the six filed a race discrimination lawsuit against the City of Chicago and the federal court certified a class of more than 6,000 African-Americans who fell into the “qualified” category on the test and were never hired.

In a motion for summary judgment, the City argued that the petitioners had not filed their claim timely with the EEOC, as the claim was filed more than 300 days after the City announced and established its policy regarding the test results. The trial court disagreed, holding that each round of hiring constituted a fresh violation of Title VII, so the plaintiff’s suit was timely. The Seventh Circuit Court of Appeals reversed, finding that “discrimination was complete when the tests were scored” and it “was discovered when the applicants learned of the test results,” and therefore the EEOC claim was not timely filed.

The Title VII Statute of Limitations and Disparate Impact Claims

Title VII provides that the statute of limitations for filing a claim of discrimination with the EEOC begins to run from the date of the “unlawful employment practice” being challenged. That date, however, has not always been clear.

Generally, discrimination cases fall into one of two categories – “discrete acts” or “continuing violations.” A “discrete act” clearly takes place on the date of the act of discrimination, and the statute of limitations begins to run on that date. A “continuing violation,” such as hostile-environment sexual harassment, occurs over time through multiple incidents of misconduct. For plaintiffs filing charges of continuing violations, each act or incident complained of begins a new statute of limitations.

The Supreme Court has addressed gray areas as well. In Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), alleging pay discrimination, the Supreme Court held that the discrete act rule, rather than the continuing violation rule, applied. The plaintiffs had claimed that the issuance of each paycheck should trigger a new statute of limitations because each paycheck reflected a discriminatory practice. The Court, however, disagreed, finding that each paycheck was merely the effect of a prior discrete act of discrimination – the original pay decision. Congress overruled Ledbetter by statute, requiring that the paycheck accrual rule apply to pay discrimination claims. See the Lilly Ledbetter Fair Pay Act of 2009.

The question raised and answered in Lewis is which method applies to disparate impact discrimination claims, where a decision about how to use the test results was made initially, then implemented repeatedly over time.

Under Section 2000e-2(k)(1)(A)(i), an employer is liable for disparate impact discrimination if “a complaining party demonstrates that respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity.”

In Lewis, the City acknowledged that its method of categorizing applicants by test results had a disparate impact on African-Americans, so the only question was whether the City used a discriminatory practice only once, or every time it drew from the applicant pool. The Seventh Circuit reached a decision similar to the Supreme Court’s decision in Ledbetter, finding that the City’s discrete act of discrimination came when it divided the applicants into three groups based on their test scores; every act after that was merely the “automatic consequence of the test scores rather than the product of a fresh act of discrimination.” Lewis v. City of Chicago, 528 F.3d 488, 491 (2008).

The Supreme Court: New Limitations Period Triggered Upon Every “Use”

The Supreme Court rejected the argument raised by the City and relied upon by the Seventh Circuit, differentiating between claims of disparate treatment and disparate impact. The Supreme Court clarified that the City’s argument – that only the initial categorization of applicants constituted a discriminatory act and every round of hiring after that was merely an “automatic consequence” of that act – only applies to disparate treatment cases which require discriminatory intent. Because disparate treatment cases require intent, only the initial intentional act or decision constitutes the act of discrimination. 130 S.Ct. at 2199. The automatic consequence or ministerial application of that original intentional act cannot constitute a new act of discrimination because intent to discriminate is not present in those consequences, which occur automatically without any intent at all. Id.

In contrast, explained the Supreme Court, in Lewis, the City’s repeated reliance upon the test score categories to draw candidates from a pool was not “automatic” or merely ministerial. Rather, for each new hiring round, the City’s affirmatively relied on the cutoff score, thereby “using” an employment policy that produced a disparate impact. Id. Each such “use” constituted a new violation of Title VII and triggered a new limitations period.

A Tough Result Either Way

The Lewis Court acknowledged that either result – its ultimate decision or the Seventh Circuit Court’s decision – produced potentially troubling results: “Under the City’s reading, if an employer adopts an unlawful practice and no timely charge is brought, it can continue using the practice indefinitely, with impunity, despite ongoing disparate impact.” Id. at 2200. That interpretation would invariably leave some plaintiffs without a viable claim or remedy, while others might file lawsuits prematurely, based on policies that are announced but never implemented. Id.

On the other hand, however, the Court recognized that its own decision raised potential problems as well. “Employers may face new disparate-impact suits for practices they have used regularly for years. Evidence essential to their business-necessity defenses might be unavailable (or in the case of witnesses’ memories, unreliable) by the time the later suits are brought.” Id. While the Court expressed concern over this possibility, it concluded that of the two possible outcomes, its ultimate decision “produces the least mischief.” Id. The Court noted that if the statute causes a significant problem for employers that Congress did not intend, it is up to Congress, not the courts, to fix that problem. Id.

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